EVRG - Earnings call transcript Q1 2022

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Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2022 Evergy Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to President host Investor like Lori today's now Vice Wright, Relations would introduce for your conference, I and Treasurer. you. Thank ahead. go Please

Lori Wright

Thank non in for the and results cause everyone, quarter morning, forward-looking some information, Today's today's you, financial of to investors. - main to at financial evergy.com. and website on include filings materially quarter, additional Blue. first differ the the this webcast future containing with available X of the are Evergy's of supplemental GAAP expectations, disclosure discussion The and will along include issued our could and call. releases SEC information us measures. for factors joining welcome our you that slide page on information this our from morning. morning, Thank Good list slides

our Campbell, On President David Executive President have Kirk and Evergy's Chief Kirk enhanced will regulatory ESG and and profile. our Chief cover quarter the first the we Officer. Andrews, detail call the Officer and I and members with quarter to legislative over of will and turn are the Vice available sales and latest first the of cover customers, outlook. today, and management Financial more priorities, highlights, our David Executive in us be the call will Other question-and-answer on portion our during financial results, now call. David. will

David A. Campbell

more year Slide to depreciation Kirk The expenses compared offset good X. margin $X.XX and income earnings Thanks, and last that in by pleased these in in was share adjusted I'll an detail. expense. as had primarily on driven adjusted transmission operating in $X.XX XXXX. by partially discuss drivers tax I'm and first per Lori, amortization and higher first-quarter to increase quarter a delivered we morning, begin will lower earnings everyone. higher over we report increase solid of

for includes widely excellence, objectives of operational become safety. our is to which recognized One

discipline management. and as both well drives culture safety consistency as performance cost strong Our of

made as an annual well With from the team XXXX did to excellent target highlights managing as to are to a tenets the our $X.XX XXXX of $X.XX Slide to EPS solid per XXXX. year, our core to clear continue job share, adjusted plan the importance our rate Keeping our growth the rates affordability, customers, our especially is given advancing We've economic of current to competitiveness few sustainability. of reliability, given our rates progress and years regional thinking at and is the presentations XX% of During sessions on constructed forefront this recordable EPS reduction project. in we of our XXXX. quarter, employees a for first territory. the of participated like service included XX at to our Evergy that focus roadshow to would the throughout relative first thank continued contributed safety quarter employees on in OSHA I their safety is has events and also dry safety to a all safe, safety focus would our a cask power and to like I Wolf first store their fuel in fuel dedication adjacent to Creek to our Wolf congratulate and for Creek's to plant reliable, guidance X the its conditions. last affordable providing concrete start customers. long-term X% in nuclear the a bunker This reaffirming storage plant. affordable campaign project spent our the completing trajectory. to strategy, This X% over

our a commercial our levels and to commodity This have peers in of elements at including strategy, our along reliability our types which more XX the or relating our not service days with practices We annually. range. utilities has is the as less been of fleet, of and [indiscernible] the high volatility investments. gas spring and of in like than element inflation a procurement all XX inflation monitoring safety. business. and aspects of operations, of reinforce of weeks than to availability many comprises prevalent natural our all in to ongoing territory conditions cost, hour gas in resiliency relatively our with are This light gust as significantly our normal, our recent regarding on of typically core other focus in managing increased and distribution given our importance includes safety, These infrastructure forefront per of We also have fuel to service, Ensuring particular, customer many more a mix the including exposure, level generation lower several well-positioned wind relative investment. decade. are miles of natural brought transmission we winds metrics seen are closely fuel in And the for revisited X% hedging

Kirkland Andrews

we solar With XX-megawatt providing levels, and sources. sustainability, half reducing announced build to to includes record nearly track XXXX respect nearly emissions our carbon by rate. January, XX% our our energy a from plans free versus carbon In of

Our Hawthorne XX February, in Evergy's electric the more That's wind vehicle to wind megawatt milestone. power power passed approval. generation than plant, regulatory cumulative enough fuel billion XXX travel. depending hour of And million miles

strategy the in our ESG towards scores cleaner and governance energy, forming yielded I'll relating Since to Evergy have we've enhanced generation which transition always X, in disclosures, significant Slide continue XXXX, balancing slide. another practice on of profile ESG reliability. element our On will measures. progress environmental, our our reflected as affordability We and in corporate social, third-party

emissions goal XXXX last by interim building reductions. and reduction carbon net record X example, an introduced year, we With on of our track For target. XXXX, of XX% our trajectory historical

and included and approach rights in social policy, also governance taken related our rights, Examples we've water to corporate formalized forward reviewing many Beyond improved expanded a by-laws, environmental among shareholder disclosures. policies human governance and updating comprehensive policy, a policy, others.

linked of equity our of execution business. aspects board In inclusion environmental and both addition, diversity, compensation successful has the and to our executive

David A. Campbell

the further our We're demonstrate of made practices. proud we've ESC leading to advancements to commitment

we plan as our ahead. the execute this and deliver momentum in results on maintaining We are sustainable focused years

recovered of interveners this for I'll the and the costs a resource fuel some priorities XXXX. discussing Kirk, non-fuel stipulation we remain Similarly, beginning by Slide returned through roughly to method regulatory annual settlement Uri Missouri our legislative customers of be period plan. clause next in key power to $XX handing be net with recently of year. two-year non-unanimous conclude our our the February of In April period, update benefits integrated will over April Kansas XXXX. at a in deferred same to summer by calls to file Winter over on and also of X. Storm The the reached agreement purchase over on one-year extraordinarily Kansas a fuel, million track costs from million and $XXX Central We for key Kansas, Now, Kansas Metro before to beginning

We initiated will consistent filing development and the discussed approximately the and impacts the Winter Kirk in will the expect costs significantly approved, securitization during million Uri that recover IRP In be renewable than filing annual that the on plan Missouri laid we moderate Investor customers. with years, period costs securitization triennial September. thereby year's If Day $XXX resource plan to out we last our last process the over extend in West. Storm Missouri, for recovery XX of these the

from of only proceeding an The $XX This order in net and service the the with this shared an Uri, requirement law property timing, And I'll approval. expect opportunity includes approximately Missouri. of customers. the in securitization for on period. bill under XXXX, PISA our the through over PISA flowing benefit to The known we Missouri of fall slide as a accounting plant X.X%, through deferrals. in the terms back and legislative extension benefits million to Metro one-year an year. extends wrap we law applicable annual bill tax last with this with In revenue at commission up tracker to related and we extend began update the month, consideration sets enhance also XXXX efforts cap

design intervenor to revenue on and mid-July direct and June We we related by to with With expect and rate legislators mid-August. due XX serve continue case, parties Xth, June has the testimony bill the with and respect testimony, we'll over rate the to to on Missouri house, the to aspects, rebuttal and testimony requirements, passage are XXnd, days. in due secure relating pending work receive the received senate encouraged to both rebuttal support next

September, settlement scheduled call for is rates Xnd. December conference and early Kirk. XXnd, on will will to constructively over effective turn Our parties working provides the the Missouri now August go forward through with resolve with to later case. I that to look month hearings We

Kirkland Andrews

Thanks, David. Slide on XX. results I'll good And start for the the with quarter morning, everyone.

per $X.XX quarter million For per XXXX. XXXX, the the $XXX first delivered $X.XX share of first $XXX share, adjusted million earnings quarter of Evergy or that's compared in to of or

by from driven items to the was left EPS First right. quarter adjusted shown on following as chart the

a investments SPAC finally, of and expense, I $XX transmission Adjusted expected, will to of increased lower amortization the tax a impact to As M expense smoothing, a adjusted our had fourth average loss higher-margin investment. EPS or related via reduced throughout one income was our expense reverse XXXX. share tax went per million higher $X.XX lower which drove as to investments, we entry due which of will quarter the distribution ventures due excludes $X.XX note transmission, $X.XX year. by unfavorable well. expense, also public increase. credit expense loss of $X.XX and depreciation approximately and income which driven $X.XX an was first-quarter our O timing on year infrastructure And in

same may our a our larger to mark-to-market of this approximately with EPS basis, $X.XX. gain recall, investment. As investment, gain this a excluded associated On accumulative results XXXX you in relative similarly net original fourth quarter

our results, adjusted year. year, range second patterns, outlook the XX% per to adjusted guidance we David approximately as EPS full expect to adjusted of And of solid given we're with our reaffirming historical our $X.XX our mentioned, $X.XX for share quarter quarter consistent over for with the contribute XXXX. total balance the combined EPS of first this earnings Finally,

Slide to I'll on sales Turning recent provide trends. customer brief XX, update and a

slide, commercial up customers left-hand the drove reflect prior positive variance especially our return trend more our while a retail to earnings, by sales with the as in expectations. which of COVID we conditions demand weather-normalized subcategory about small of and higher. working basis fewer were industrial XX year, line largely normal for as from Demand demand the this see expected continues you in will in the points, the with as overall, residential On lower to home, reversal side of quarter impact are the

slide on construction summarized jobs the over for new the to expected is as City a Facebook, for bring chose X,XXX which to $XXX Kansas lower region the Meta, center, economic As million area. development data front, right on known the the formerly

EPS year's of last territory. service site that Bombardier guidance And return capital region. jobs finally, our And home selected $XXX to which our to maintaining as growth the bio a XXXX the finally as to for with our XXX the line will Additionally, midpoint a bring ratio on to the to strong on based meaningful was our of of the of as of expected new facility, track growth record to EPS we along world, long-term our Kansas, original headquarters, to million to portion X% is keep a and $X.XX. dividend Wichita, earnings. Northeast our continuing month, add shareholders remains XX, earnings that be payout annual in U.S. rate And last execution. dividend of on reaffirmed for our demonstrate that Kansas guidance focus XXXX, of by slide growth XXXX expect Air eps X% well to announced compounded will jobs We've adjusted from new of new its hundreds manufacturing

affordability, our generation reliability the We I'll With rate continue to base XXXX, which in enhance while improve growth X% reflected that, David. transitioning and the our $XX.X consistent advancing billion CapEx customer service, of as plans with our XXXX to to is invest in hand X% infrastructure from five-year and sustainability call XXXX. to our to through targeted fleet back

David A. Campbell

questions. We now welcome your

Operator

roster. by compile Q&A Please while we stand the Instructions] [Operator

comes question Research. from first Sullivan the Michael line of Your from Wolfe

now Your open. line is

Michael Sullivan

Hey, morning. everyone. Good

David A. Campbell

morning. Good

Michael Sullivan

change some does get you that waylay or sense legislation Missouri process, the it on could there, there us of more Wanted through maybe color just if or here to you a working things little start just a and pending with you the give level invest do at late matter opposition really think that? does case frequency that how the you of of and things way And filings it moment? things could is done, about if the last like is

David A. Campbell

Thanks, It's Michael. great question.

support the bills passing for extension the senate the house. the We have the reflected through broad-based diversions both and

marathon just the the of with rates the So of working session tomorrow. a main through this main to working is every thing both week through. things the the through to It's bill at the through issue and from the end issue through can so bit get a that's the session, night just session get typically through as work really point a race, with pending that's we

I In what reliability reflects the of terms in peace piece resources for as in system, it's and well affordability on focus ongoing support in of of a our of renewable that's support as liability. Missouri both for with think plan, done the the transition resiliency is the reflecting investment the towards the and --

reinforces basis. changes don't so an in allows the I and it the the So accents, the of know do plan, just themes that and orderly us plan for to

timetable In mandated case terms bill of the a to fixed rate or and we this over one. don't fall require have scheduled,

get level of when to file to Hopefully the that balance that'll of the sense. terms makes in plans usual be our by factors when change you won't it case. think a driven want timing, investment really things we I that So

Michael Sullivan

wanted the to does. And circle it Yes, then resource near-term to planning. also back just

I call, had last on on then in update think that, coal I with retirement. you Lawrence the us just was stands? bit the the that plant XXX it like little Can solar you think sounded megawatt a and around slipping project an conjunction that where update provide

David A. Campbell

hand briefly Pixley. solar XXX farm farm, but process so on that pulled considering just I'll for say, have a solar mentioned Sure. And we last call. predetermination the megawatt that I'll call We we actively we are that, still it, to Kirk,

timing for Pixley driver was plans. which any does that a it linking rate the the in as traditional of material a coal Kansas had it described impact. the have addition market-based that rate so forecast our is our because earnings think two I period unit we earnings the not plant It's farm. a we of noted was question timeline nature solar addition, Lawrence, last that you kind we call, noted, also a not of base in not structure on We the The the material retirement outside Lawrence to were plant, there

we online. still no convert gas, megawatts all we're XXX thinking planning unit XXX megawatts, to think which so I can five lines. along we're to will keep is asset But longer retire those reliability

in So again, consistent think firm. that's and And rate Kirk a the growth with very laid earnings plan. still the [Indiscernible] trajectory I its we've out that

Kirkland Andrews

headwinds of talked of to if item And be with of Commerce obviously very least some little seen of of results just a the the you the of about around project. think not work constructively David meaningful with and consistency early I've recent selling, that's we delay, good and at said, I look on counter-party On countervailing focused a anti-dumping of a as in Investigation it Department certainty this, on costs that plans. to a there. pacing the in think I of lot our driver earnings But our as overall, we've duties, to going bit years

at closer to we're earnings counterpart shifts small relatively just it's would here. it we us consistent anything, strength. as which to and project, -- But process continue if So going forward the deliver move our to should more the manage point

David A. Campbell

know, And Integrated Michael, as calls. -- it's a our RR big Plan IRP, focus know Resource -- you was been in I recent our

We have the over near-term. less solar

We in XXXX. XXXX, solar solar online in that XXXX. scheduled of our us so next not in for we're had until to come So of tranche megawatts is XXXX, wind adding IRP XXX

So we're the the in less exposed chain to the issues supply tariff near-term and proceeding.

Michael Sullivan

all [Indiscernible] for Thanks helpful. Super the

David A. Campbell

you. Thank

Operator

next from line the of Sachs. from Your comes Lapides Goldman Michael question

open. now is line Your

Michael Lapides

guys. Hey,

does us both how in remind about maybe the are expense one more market, the rates, the that status through liability you're flows pension which move moving funded importantly, thinking to thing. Just given pension O&M? and what you given pension on in that status Can as

David A. Campbell

predominance of Michael. It's a this the Michael. morning, Michael following Michaels morning. Good

an So giving earnings for states. not mechanisms our the we're it's us, that have two in don't we only exposure, regulatory

mechanisms how Our regulatory our some other funding related to work. plans relatively is status lower again funding and that's than

So customers. in rates the to the expect through is show level. change flow impact continue that I this to to going trend have think material that the cost don't a funding We we'll on

relative I pretty simplest And with. that this not and So us, earnings arcane setup to can in through others, offline, for you headlines summary got can maybe the our struggle. a but one is it's thing to go is go

Michael Lapides

where knew or PPAs? had I wouldn't helpful, of did as Yeah, update super it. about Got Missouri discussions I other Kansas buy-in track the question, well. the wind That's just appreciated. One any much on

David A. Campbell

I've getting that progression tell of The with buy-ins -- a enough given at counterparties, is we've targeting, Michael. as year. we're with done the I'd quarter remain of counterparties those you potentially and active repowering one fourth Sure, dialogue We at the progressing only we're call, thing with felt those discussion. of those subset in dialogue this we said least confident

that just or I'll that continue should reaffirm you we and we'll apprised continuing project that So keep to we're target say. process, as to I progress

Michael Lapides

much not be it. And Got all incremental? in would so Thanks, that appreciated. your CapEx guidance, that's

David A. Campbell

Direct. It incremental, would is That yes. not. be

Michael Lapides

it. guys. Thanks, Much. Got Appreciated.

David A. Campbell

Michael. you, Thank

Operator

Your next question Julien line Dominion of comes from of the Bank America. from

now is line Your open.

Darius Anderson

good Hey, guys. is is the Darius morning. this Thanks time for for This Julien. morning,

from Just megawatts through that to takes, Can of kind back the XXX the to discussion. a puts how a Gas at the the you wanted solar be compared just appears on maybe their converging come relative of Lauren hold and capital to talk other? to the to the perspective, maybe moment, one

David A. Campbell

replacement. and we them for Darius, linking are Partly morning, question. Good the energy thanks for

Pixley impact we'll That linked forecast have beyond unusual main consider just certainly and process, that didn't our period. perspective those it the meaningful products We together. we efficient because why two can earnings till linking it's predetermination we if link -- so Again, and pretty we over the were two very that the where any go driver regulatory decouple them can is to to through really also was solar a need time. from

impact is the rate the of there's course, large-unit form that because relatively online. less but keeping relatively We to but line. gas, that impact modest also base. plant There's Lawrence bulk So would securitize from impact on we the to from keep we're converting the [Indiscernible], coal of happen from modest plan some that,

convenience So we perspective must. regulatory two, to, link energy need again, it's a not don't proceeding a and of matter the but it's from a management

-- at Lawrence. solar, we So that the we'll accommodate the an from that planning of of can resource I retirement to as that evaluate integrated think perspective, look continue we cost

overall price at, That's talking we environment. believe to we're something may see Your next of it not. number question or timeline commodity relate have 'XX, the certainly about to gas our what cycles, of natural look though we'll 'XX,

long but how we but currently they dynamically. linked, will won't this are. see -- one necessarily we'll So that be at those goes, look They still

Darius Anderson

sit you. Thank out I certainly on of in environment that's in inflationary this objectives you with wind. been very helpful. more to to and are QX we Obviously, Okay. respect call. this That's if -- relates the can, guys to One some again, relates discussion the

stated build just you are some the for hoping mid-decade to frame, those conversations have for an can guys for time that trends give execute agreements you're wind, in delivery progressing? on You update how

Kirkland Andrews

'XX, course Kirk we do reminder, a XXX. Darius, -- so across wind and and XXX the megawatts course XXX across Hey, of the of as 'XX it's have

to I shortlisted relative relatively progress dialogue. to year, counter been a and you, reasonably got we're that that think robust. process, updated We've and last parties, have we we're again, objective, continuing fourth-quarter, launched and an oversubscribed we RFP responses As

we I seen those you time bill of update responses online, get constructive done from think part in and getting as XXX. level transfer an targeting 'XX. We're we first execution and that of that, we're counter 'XX on now to we that forward. we'll first engagement first the move parties, in with especially projects deliver still with to And it continue megawatts some as have we've process, that to of as sounds of track say on the focusing XXX that installment

Darius Anderson

Thank I'll you. the appreciate turn back it I here. Okay, color.

David A. Campbell

Darius. Thanks

Operator

David time. like now no Campbell, would There and to the President further questions this I conference at back to are CEO. turn

David A. Campbell

We'll Great. conclude a your Have Thanks great day. Blue. with everyone in that. Thank for you, interest Evergy.

Operator

have This concludes Thank you conference day. and a call. wonderful for today's participating

may disconnect. You now

Evergy (EVRG) 5 May 222022 Q1 Earnings call transcript